Exhibit 10.41
ST. XXXX RE, INC.
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
July 5, 2002
Xxxxxxx X. Xxxxxxxxxxx
00 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Dear Xxxxxxx:
I am writing this letter (the "Letter Agreement") on behalf of St. Xxxx
Re, Inc. ("SPR" or the "Company"), currently a division of The St. Xxxx
Companies, Inc. ("SPC"), to confirm the terms and conditions of your
employment with SPR or Platinum Underwriters Holding, Ltd., a Bermuda
corporation and Platinum Underwriters Reinsurance, Inc., a Maryland
corporation ("Platinum"), which is expected to acquire certain assets of SPR
in connection with an initial public offering (the "IPO") of Platinum
Underwriters Holdings, Ltd. ("Holdings").
1. TERM OF EMPLOYMENT.
Your employment will commence no later than August 12, 2002 (the
"Effective Date") and, subject to termination as provided in Section 7, shall
end on the third anniversary of the Effective Date; provided that on the
third anniversary of the Effective Date and each anniversary thereafter, the
term of your employment shall automatically be extended by an additional year
unless the Company or you give the other party written notice, at least 30
days prior to the applicable anniversary of the Effective Date, that you or
it does not want the term to be so extended. Such employment period, as
extended, shall hereinafter be referred to as the "Term."
Upon consummation of the IPO, the Company shall promptly assign all of
its rights and obligations hereunder to Platinum and shall, upon such
assignment, cease to be a party to this Letter Agreement (except as otherwise
provided herein) and Platinum will be the sole obligor hereunder. Following
assignment of this Letter Agreement to Platinum, all references herein to the
"Company" shall be deemed to mean Platinum and all references to the "Board"
shall be deemed to mean the Board of Directors of Platinum.
2. TITLE AND DUTIES.
During the Term, you will serve as Executive Vice President and General
Counsel of the Company and will have such duties and responsibilities and
power and authority as those normally associated with such position in public
companies of a similar stature, plus any additional duties, responsibilities
and/or power and authority assigned to you by, the Chief Executive Officer of
the Company.
3. Base Salary.
During the Term, the Company will pay you a minimum base salary (the
"Base Salary") at an annual rate of $350,000 (the "Base Salary") payable in
accordance with the Company's payroll practices as in effect from time to
time.
4. BONUS.
(a) ANNUAL. During the Term, you will be entitled to receive an annual
bonus (the "Annual Bonus") pursuant to the Company's annual incentive
plan, with a target bonus opportunity of seventy-five percent (75%) of
Base Salary (the "Target Bonus"); provided however that (i) you will be
entitled to receive a minimum Annual Bonus for the calendar year 2002
in an amount equal to a pro rata portion of fifty percent (50%) of your
Base Salary adjusted for the period beginning with the Effective Date
ending at December 31, 2002, (ii) you will be entitled to receive a
minimum Annual Bonus for the calendar year 2003 in an amount equal to
fifty percent (50%) of your Base Salary and (ii) you will be entitled
to receive a minimum Annual Bonus for the calendar year 2004 in an
amount equal to fifty percent (50%) of your Base Salary.
(b) SIGN-ON BONUS. On the Effective Date, the Company shall pay you a
one-time cash sign-on bonus of $275,000.
5. STOCK OPTION GRANT.
Upon consummation of the IPO, you will be entitled to receive a stock
option grant to purchase 150,000 shares of Holdings common stock (the "IPO
Grant") at a price not greater than the initial offering price under the IPO
and having a term of ten years. Subject to the specific terms of this Letter
Agreement, the terms and conditions of your IPO Grant will provide for vesting
in equal annual installments on each of the first four anniversaries of the
date of the IPO Grant, provided you are then employed by SPR.
6. TERMINATION OF EMPLOYMENT.
(a) Resignation for Good Reason or Termination Without Cause. If you
terminate your employment for Good Reason or you are terminated by the
Company without Cause, you will receive, immediately upon the
effectiveness of any such termination, a lump sum cash payment equal to
the sum of (i) one year's Base Salary and Target Bonus, and (ii) any
earned but unpaid Base Salary or other amounts (including reimbursable
expenses and any vested amounts or benefits under the Company's
otherwise applicable employee benefit plans or programs) accrued or
owing through the date of termination, provided that you execute a
release
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substantially in the form attached hereto as Exhibit A concurrently
with such payment.
(b) TERMINATION OTHER THAN FOR GOOD REASON OR FOR CAUSE. If you terminate
your employment other than for Good Reason or if your employment is
terminated by the Company for Cause, you will receive no further
payments, compensation or benefits under this Letter Agreement, except
you will be eligible to receive, upon the effectiveness of such
termination, amounts (including reimbursable expenses and any vested
amounts or benefits under the Company's otherwise applicable employee
benefit plans or programs) accrued or owing prior to the effectiveness
of your termination.
For purposes of this Letter Agreement, "Cause" means (i) your willful
and continued failure to substantially perform your duties hereunder;
(ii) your conviction of, or plea of guilty or NOLO CONTENDERE to, a
felony or other crime involving moral turpitude; or (iii) your
engagement in any malfeasance or fraud or dishonesty of a substantial
nature in connection with your position with the Company or other
willful act that materially damages the reputation of the Company;
provided, however, no such act, omission or event shall be treated as
"Cause" under this Agreement unless you have been provided a detailed,
written statement of the basis for the Company's belief that such act,
omission or event constitutes "Cause" and have had at least a thirty
(30) day period to take corrective action. For purposes of this
Section, no act or failure to act will be considered "willful" unless
it is done, or omitted to be done, in bad faith and without reasonable
belief that the action was in the best interest of the Company.
For purposes of this Letter Agreement, "Good Reason" means (i) the
Company reduces your Base Salary or your Target Bonus without your
express written consent; (ii) the Company reduces the scope of your
duties, responsibilities or authority without your express written
consent; (iii) the Company requires you to report to anyone other the
Chief Executive Officer; (iv) the Company requires you to be
principally based more than 35 miles from the Company's offices in New
York or Bermuda; (v) the Company breaches any other material provision
of this Letter Agreement; (vi) the resignation by you for any reason
during the 30-day period commencing eighteen months from the Effective
Date if an IPO has not occurred; (vii) SPR fails to assign this Letter
Agreement to Platinum prior to or promptly upon the IPO or (viii) the
Company elects not to extend the term of this Agreement; provided,
however, that if you voluntarily consent to any reduction or change
described above in lieu of exercising your right to resign for Good
Reason and deliver such consent to the Company in writing, then such
reduction, transfer or change shall not constitute "Good Reason"
hereunder, but you shall have the right to
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resign for Good Reason under this Agreement as a result of any
subsequent reduction described above.
7. COVENANTS.
In exchange for the remuneration outlined above, in addition to
providing service to the Company as set forth in this Letter Agreement, you
agree to the following covenants:
(a) CONFIDENTIALITY. During the period of your employment and for a period
of three years following any termination of your employment, you will
keep confidential any trade secrets and confidential or proprietary
information of SPC, SPR and Platinum which are now known to you or
which hereafter may become known to you as a result of your employment
or association with SPC, SPR and Platinum and will not at any time
directly or indirectly disclose any such information to any person,
firm or corporation, or use the same in any way other than in
connection with the business of SPC, SPR and Platinum during, and at
all times after, the termination of your employment. For purposes of
this Letter Agreement, "trade secrets and confidential or proprietary
information" means information unique to SPC, SPR and Platinum which
has a significant business purpose and is not known or generally
available from sources outside SPC, SPR and Platinum or typical of
industry practice, but shall not include any of the foregoing (i) that
becomes a matter of public record or is published in a newspaper,
magazine or other periodical available to the general public, other
than as a result of any act or omission of you or (ii) that is required
to be disclosed by any law, regulation or order of any court or
regulatory commission, department or agency, provided that you give
prompt notice of such requirement to SPC, SPR and Platinum, as
appropriate, to enable SPC, SPR and Platinum, as appropriate, to seek
an appropriate protective order or confidential treatment.
(b) NON-SOLICITATION. You further covenant that during the term of your
employment and during the fifteen month period following termination of
your employment for any reason, you will not, directly or indirectly,
hire, or cause to be hired by an employer with whom you may ultimately
become associated, any senior executive of SPC, SPR or Platinum at the
time of termination of your employment with the Company (defined for
such purposes to include executives that report directly to you or that
report directly to such executives that report directly to you).
8. REPRESENTATIONS. By signing this Letter Agreement where indicated below,
you represent that you are not subject to any employment agreement or non-
competition agreement that could subject the Company to any future
liability or
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obligation to any third party as a result of the execution of this Letter
Agreement and your appointment to the positions with the Company described
above.
9. MISCELLANEOUS PROVISIONS.
(a) This Letter Agreement may not be amended or terminated without the
prior written consent of you and the Company.
(b) This Letter Agreement may be executed in any number of counterparts
which together will constitute but one agreement.
(c) This Letter Agreement will be binding on and inure to the benefit of
our respective successors and, in your case, your heirs and other legal
representatives. Other than as provided herein, the rights and
obligations described in this Letter Agreement may not be assigned by
either party without the prior written consent of the other party.
(d) All disputes arising under or related to this Letter Agreement will be
settled by arbitration under the Commercial Arbitration Rules of the
American Arbitration Association then in effect as the sole and
exclusive remedy of either party. Such arbitration shall be held in New
York City. Any judgment on the award rendered by such arbitration may
be entered in any court having jurisdiction over such matters. Each
party's costs and expenses of such arbitration, including reasonable
attorney fees and expenses, shall be borne by such party, unless you
are the prevailing party in the award entered in such arbitration, in
which case, all such costs and expenses shall be borne by the Company.
(e) All notices under this Letter Agreement will be in writing and will be
deemed effective when delivered in person, or five (5) days after
deposit thereof in the mails, postage prepaid, for delivery as
registered or certified mail, addressed to the respective party at the
address set forth below or to such other address as may hereafter be
designated by like notice. Unless otherwise notified as set forth
above, notice will be sent to each party as follows:
YOU, TO:
The address maintained in the Company's records
SPC OR SPR. TO:
The address of SPC's principal place of business
Attention: General Counsel
PLATINUM, TO:
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The address of Platinum's principal place of business
Attention: Chief Executive Officer
In lieu of personal notice or notice by deposit in the mail, a party may
give notice by confirmed telegram, telex or fax, which will be effective upon
receipt.
(f) This Letter Agreement will be governed by and construed and enforced in
accordance with the laws of the State of New York without reference to
rules relating to conflict of laws.
(g) This Letter Agreement supercedes any inconsistent provisions of any
plan or arrangement that would otherwise be applicable to you to the
extent such provisions would limit any rights granted to you hereunder
or expand any restrictions imposed on you hereby.
This Letter Agreement is intended to be a binding obligation upon the
Company and yourself. If this Letter Agreement correctly reflects your
understanding, please sign and return one copy to me for the Company's
records.
ST. XXXX RE, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Executive Officer
The above Letter Agreement correctly reflects our understanding, and I hereby
confirm my agreement to the same.
/s/ Xxxxxxx X. Xxxxxxxxxxx
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Xxxxxxx X. Xxxxxxxxxxx
Dated as of July 9, 2002
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